-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QIFniQmmkduVbXSdZXk7fAJVbtSpD5QZd/ztnnxKsREYSwdEgDBQGZEytn0rfwHk 1+30EyyUA+PHlouuyUD4ug== 0000950123-96-002247.txt : 19960514 0000950123-96-002247.hdr.sgml : 19960514 ACCESSION NUMBER: 0000950123-96-002247 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960329 FILED AS OF DATE: 19960513 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FOSTER WHEELER CORP CENTRAL INDEX KEY: 0000038321 STANDARD INDUSTRIAL CLASSIFICATION: HEAVY CONSTRUCTION OTHER THAN BUILDING CONST - CONTRACTORS [1600] IRS NUMBER: 131855904 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-00286 FILM NUMBER: 96561674 BUSINESS ADDRESS: STREET 1: PERRYVILLE CORPORATE PARK CITY: CLINTON STATE: NJ ZIP: 08809 BUSINESS PHONE: 9087304090 10-Q 1 FORM 10-Q FOSTER WHEELER 1 FORM 10Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------- [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended March 29, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from ____ to ____ Commission File Number 1-286-2 FOSTER WHEELER CORPORATION ---------------------------------------------------------------------- (Exact name of registrant as specified in its charter) New York 13-1855904 ------------------------------- ---------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Perryville Corporate Park, Clinton, N. J. 08809-4000 ----------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (908) 730-4000 -------------- (Not Applicable) Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes (X) No ( ) Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of March 29, 1996 was 40,569,071 shares. 2 FOSTER WHEELER CORPORATION INDEX Page No. -------- Part I Financial Information: Item 1 - Financial Statements: Condensed Consolidated Balance Sheet at March 29, 1996 and December 29, 1995 2 Condensed Consolidated Statement of Earnings Three Months Ended March 29, 1996 and March 31, 1995 3 Condensed Consolidated Statement of Cash Flows Three Months Ended March 29, 1996 and March 31, 1995 4 Notes to Condensed Consolidated Financial Statements 5 - 7 Item 2 - Management's Discussion and Analysis of Results of Operations and Financial Condition 8 - 11 Part II Other Information: Item 4 - Submission of Matters to a Vote of Security Holders 12 Item 6 - Exhibits and Reports on Form 8-K 13 - 1 - 3 PART I. FINANCIAL INFORMATION FOSTER WHEELER CORPORATION AND SUBSIDIARIES Item 1. - Financial Statements - ------------------------------ Condensed Consolidated Balance Sheet ------------------------------------ (In Thousands of Dollars) ------------------------- March 29, 1996 December 29, ASSETS (Unaudited) 1995 - ------ -------------- ------------ Current Assets: Cash and cash equivalents $ 205,669 $ 167,131 Short-term investments 136,087 112,853 Accounts and notes receivable 679,105 715,739 Contracts in process 341,304 340,526 Inventories 37,423 42,716 Prepaid and refundable income taxes 39,617 39,346 Prepaid expenses 17,882 20,662 ----------- ----------- Total Current Assets 1,457,087 1,438,973 ---------- ---------- Land, buildings and equipment 976,656 944,596 Less accumulated depreciation 309,788 299,784 ----------- ----------- Net book value 666,868 644,812 ----------- ----------- Notes and accounts receivable - long-term 66,403 63,632 Investments and advances 57,262 56,767 Intangible assets - net 258,931 260,070 Deferred charges and prepaid pension cost 315,409 308,369 Deferred income taxes -0- 3,186 ------------- ----------- Total Assets $2,821,960 $2,775,809 ============= =========== LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ Current Liabilities: Current installments on long-term debt $ 35,057 $ 34,648 Bank loans 94,763 86,869 Accounts payable and accrued expenses 498,216 539,582 Estimated costs to complete long-term contracts 430,538 475,899 Advance payments by customers 106,594 74,821 Income taxes 34,417 28,457 ------------ ----------- Total Current Liabilities 1,199,585 1,240,276 Long-term debt, less current installments 632,221 554,404 Other long-term liabilities, deferred credits, postretirement benefits other than pensions and minority interest in subsidiary companies 326,867 333,421 Deferred income taxes 22,965 21,841 ---------- ---------- Total Liabilities 2,181,638 2,149,942 ---------- ---------- Stockholders' Equity: Common stock 40,580 40,498 Paid-in capital 195,731 192,721 Retained earnings 437,347 421,804 Accumulated translation adjustment (33,041) (28,861) ------------ ------------ 640,617 626,162 Less cost of treasury stock (295) (295) ------------ ------------ Total Stockholders' Equity 640,322 625,867 ------------ ------------ Total Liabilities and Stockholders' Equity $2,821,960 $2,775,809 ============= =========== See notes to financial statements. - 2 - 4 FOSTER WHEELER CORPORATION AND SUBSIDIARIES Condensed Consolidated Statement of Earnings -------------------------------------------- (In Thousands of Dollars, Except Per Share Amounts) --------------------------------------------------- (Unaudited) ----------- Three Months Ended -------------------------------- March 29, 1996 March 31, 1995 -------------- -------------- Revenues: Operating revenues $ 843,916 $ 635,993 Other income 10,507 7,652 ---------- ---------- Total revenues 854,423 643,645 ---------- ---------- Costs and expenses: Cost of operating revenues 726,642 546,227 Selling, general and administrative expenses 72,622 54,130 Other deductions 18,186 13,896 Minority interest 1,266 1,163 ---------- ---------- Total costs and expenses 818,716 615,416 ---------- ---------- Earnings before income taxes 35,707 28,229 Provision for income taxes: Federal and foreign 11,217 9,225 State 1,054 1,124 ---------- ---------- 12,271 10,349 ---------- ---------- Net earnings $ 23,436 $ 17,880 ========== ========== Weighted average number of common shares outstanding 40,512,674 35,819,048 ========== ========== Earnings per share $ .58 $ .50 =========== =========== Cash dividends paid per common share $ .195 $ .185 ========== ========== See notes to financial statements. - 3 - 5 FOSTER WHEELER CORPORATION AND SUBSIDIARIES Condensed Consolidated Statement of Cash Flows ---------------------------------------------- (In Thousands of Dollars) ------------------------- (Unaudited) ----------- Three Months Ended ------------------------------ March 29, 1996 March 31, 1995 -------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 23,436 $ 17,880 Adjustments to reconcile net earnings to cash flows from operating activities: Depreciation and amortization 16,127 12,011 Noncurrent deferred tax 4,701 (3,553) Other (1,548) (1,134) Changes in assets and liabilities: Receivables 32,260 (41,273) Contracts in process and inventories 3,232 (34,967) Accounts payable and accrued expenses (39,789) (31,694) Estimated costs to complete long-term contracts (42,375) 29,808 Advance payments by customers 31,875 (15,400) Income taxes 5,894 6,850 Other assets and liabilities (2,108) (2,347) --------- --------- NET CASH PROVIDED/(USED) BY OPERATING ACTIVITIES 31,705 (63,819) --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (43,784) (9,255) Proceeds from sale of properties 306 222 Increase in investments and advances (430) (3,542) (Increase)/decrease in short-term investments (22,032) 10,544 Partnership distributions (4,859) (4,883) --------- --------- NET CASH (USED) BY INVESTING ACTIVITIES (70,799) (6,914) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Dividends to stockholders (7,893) (6,623) Proceeds from the exercise of stock options 1,705 92 Increase in short-term debt 7,611 23,772 Proceeds from long-term debt 98,302 26,229 Repayment of long-term debt (19,860) (4,013) --------- --------- NET CASH PROVIDED BY FINANCING ACTIVITIES 79,865 39,457 --------- --------- Effect of exchange rate changes on cash and cash equivalents (2,233) 8,179 --------- --------- INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 38,538 (23,097) Cash and cash equivalents at beginning of year 167,131 235,801 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 205,669 $ 212,704 ========= ========= Cash paid during period: - Interest (net of amount capitalized) $ 5,880 $ 4,426 - Income taxes $ 2,392 $ 6,292 See notes to financial statements. - 4 - 6 FOSTER WHEELER CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements ---------------------------------------------------- (In Thousands of Dollars, Except Per Share Amounts) --------------------------------------------------- (Unaudited) ----------- 1. The condensed consolidated balance sheet as of March 29, 1996, and the related condensed consolidated statements of earnings and cash flows for the three month periods ended March 29, 1996 and March 31, 1995 are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of such financial statements have been included. Such adjustments only consisted of normal recurring items. Interim results are not necessarily indicative of results for a full year. The financial statements and notes are presented in accordance with Form 10-Q and do not contain certain information included in the Corporation's Annual Report on Form 10-K for the fiscal year ended December 29, 1995 filed with the Securities and Exchange Commission March 19, 1996, which should be read in conjunction with this report. In conformity with generally accepted accounting principles, management must make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expense during the reporting period. Actual results could differ from those estimates. 2. In the ordinary course of business, the Corporation and its subsidiaries enter into contracts providing for assessment of damages for nonperformance or delays in completion. Suits and claims have been or may be brought against the Corporation by customers alleging deficiencies in either equipment design or plant construction. Based on its knowledge of the facts and circumstances relating to the Corporation's liabilities, if any, and to its insurance coverage, management of the Corporation believes that the disposition of such suits will not result in charges against assets or earnings materially in excess of amounts previously provided in the accounts. The Corporation and its subsidiaries, along with many other companies, are codefendants in numerous lawsuits pending in the United States and Canada, in which plaintiffs claim damages for personal injury or property damage alleged to have arisen from the exposure to or use of asbestos. At March 29, 1996, there were approximately 82,000 suits pending. Approximately 11,000 new claims were filed in the three-month period ended March 29, 1996 and approximately 6,500 were either settled or dismissed without payment. Any settlement costs not covered by the Corporation's insurance carriers were immaterial. The Corporation has agreements with insurance carriers covering a substantial portion of its potential costs relating to pending claims. Management of the Corporation has carefully considered the financial viability and legal obligations of its insurance carriers and has concluded that the insurers will continue to adequately fund claims and defense costs relating to asbestos litigation. The Company accrues as a liability any "probable" losses relating to litigation and records as an asset related "probable" insurance recoveries. Based on its knowledge of relevant facts and circumstances, on its determination of the availability and extent of insurance coverage, and on the advice of the Corporation's special counsel, the management of the Corporation is of the opinion that the ultimate disposition of pending and future asbestos-related lawsuits will not result in material charges against assets or earnings. -5- 7 FOSTER WHEELER CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements ---------------------------------------------------- (In Thousands of Dollars, Except Per Share Amounts) --------------------------------------------------- (Unaudited) ----------- (Continued) ----------- 3. The Corporation maintains two revolving credit facilities with a syndicate of banks. One is a short-term revolving credit facility of $100,000 with a maturity of 364 days and the second is a $300,000 revolving credit facility with a maturity of four years (collectively, the "Revolving Credit Facilities"). The Revolving Credit Facilities contain two financial covenants. The first covenant is that the Consolidated Fixed Charges Coverage Ratio (as defined in the Revolving Credit Facilities) shall be greater than 2.5:1 for each period of four consecutive fiscal quarters. The Consolidated Fixed Charges Coverage Ratio for the period ending March 29, 1996 was 2.83. The Revolving Credit Facilities also require the Consolidated Leverage Ratio, as defined therein, not exceed 0.5:1. As of March 29, 1996, the ratio was 0.41:1. 4. A total of 2,477,512 shares were reserved for issuance under the stock option plans; of this total 1,344,500 were not under option. 5. Foster Wheeler Corporation had a backlog of firm orders as of March 29, 1996 of $6,534,120, as compared to a backlog as of March 31, 1995 of $5,425,077. 6. Earnings per share data have been computed on the weighted average number of shares of common stock outstanding. Outstanding stock options have been disregarded because their effect on earnings per share would not be significant. 7. Interest income and cost for the following periods are: Three Months Ended ---------------------------------- March 29, 1996 March 31, 1995 -------------- -------------- Interest income $5,214 $5,896 ======= ======= Interest cost $13,802 $11,093 ======= ======= Included in interest cost is interest capitalized on self-constructed assets, which is insignificant for both periods noted. -6- 8 FOSTER WHEELER CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements ---------------------------------------------------- (In Thousands of Dollars, Except Per Share Amounts) --------------------------------------------------- (Unaudited) ----------- (Continued) ----------- 8. Changes in stockholders' equity for the three months ended March 29, 1996 were as follows:
Common Stock Accumulated Treasury Stock Total -------------------- Paid-in Retained Translation -------------------- Stockholders' Shares Amount Capital Earnings Adjustment Shares Amount Equity ------ ------ ------- -------- ---------- ------ ------ ------ Balance December 29, 1995 40,498,481 $ 40,498 $ 192,721 $ 421,804 $ (28,861) 10,804 $ (295) $ 625,867 Net earnings 23,436 23,436 Dividends paid - common (7,893) (7,893) Sold under stock options 56,833 57 1,648 1,705 Tax benefits related to incentive plan and stock options 294 294 Common stock issued under incentive plans 24,561 25 1,068 1,093 Translation adjustment (4,180) (4,180) ---------- ---------- ---------- ---------- ---------- ------ ---------- ---------- Balance March 29, 1996 40,579,875 $ 40,580 $ 195,731 $ 437,347 $ (33,041) 10,804 $ (295) $ 640,322 ========== ========== ========== ========== ========== ====== ========== ==========
- 7 - 9 FOSTER WHEELER CORPORATION AND SUBSIDIARIES Item 2.- Management's Discussion and Analysis - ------ ------------------------------------ of Results of Operations and Financial Condition (Unaudited) ------------------------------------------------------------ The following is Management's Discussion and Analysis of certain significant factors that have affected the financial condition and results of operations of the Corporation for the periods indicated below. This discussion and analysis should be read in conjunction with the 1995 Annual Report on Form 10-K filed March 19, 1996. Results of Operations Three months ended March 29, 1996 compared to three months ended March 31, 1995 - ------------------------------------------------------------------------------- The Corporation's consolidated backlog at March 29, 1996 totaled $6,534.1 million, the highest in the history of the Corporation. This represented an increase of $1,109.0 million or 20% over the amount reported for the same period in 1995. The dollar amount of backlog is not necessarily indicative of the future earnings of the Corporation related to the performance of such work. Although backlog represents only business which is considered firm, cancellations or scope adjustments may occur. Due to factors outside the Corporation's control, such as changes in project schedules, the Corporation cannot predict with certainty the portion of backlog not to be performed. Backlog has been adjusted to reflect project cancellations, deferrals, and revised project scope and cost. The net reduction in backlog from project adjustments and cancellations for the three months ended March 29, 1996 was approximately $390 million, compared with $56 million for the three months ended March 31, 1995. Furthermore, the Corporation's future award prospects include several large scale international projects and, because the large size and uncertain timing can create variability in the Corporation's contract awards, future award trends are difficult to predict with certainty. The Engineering and Construction ( E & C) Group had backlog of $4,691.9 million at March 29,1996, which represented a 19% increase from March 31,1995 due primarily to the orders reported by the Environmental subsidiary in the United States and the French subsidiary. The Energy Equipment Group had backlog of $1,588.7 million at March 29, 1996, a 33% increase from backlog at March 31, 1995 due primarily to the orders taken by the Spanish subsidiary in the Energy Equipment Group and the purchase of the power generation business of A. Ahlstrom Corporation (Pyropower) in the fourth quarter of 1995. New orders awarded for the three months ended March 29, 1996 of $1,417.4 million were 51% higher than new orders awarded for the three months ended March 31, 1995 of $937.3 million. In excess of 50% of new orders in the three months ended March 29, 1996 were for projects awarded to the Corporation's subsidiaries located outside the United States. Key geographic regions contributing to new orders awarded for the three months ended March 29, 1996 were the United States, Europe, and the Middle East. The principal reasons for the increase in new orders awarded for the three months ended March 29, 1996 as compared to the same period in 1995 were the significant awards made to the U.S. subsidiaries of $503.4 million and the United Kingdom subsidiary of $250.1 million in the E & C Group, as well as orders awarded to the Spanish subsidiary in the Energy Equipment Group of $155.8 million. -8- 10 FOSTER WHEELER CORPORATION AND SUBSIDIARIES Item 2.- Management's Discussion and Analysis - ------ ------------------------------------ of Results of Operations and Financial Condition (Unaudited) ------------------------------------------------------------ (Continued) ----------- Operating revenues increased in the three months ended March 29, 1996 by $207.9 million compared to the three months ended March 31, 1995 to $843.9 million from $636.0 million. The Energy Equipment Group was primarily responsible for the increase in operating revenues, accounting for approximately 75% of this increase, or $156.2 million. Of the increase in the Energy Equipment Group's operating revenues, $122.0 million was related to power generation business and was primarily attributable to the Pyropower acquisition. The balance of the increase is primarily related to the operations of the Italian affiliate of the E & C Group. Gross earnings increased $27.5 million to $117.3 million from $89.8 million or 31% in the three months ended March 29, 1996 as compared with the three months ended March 31, 1995. The E & C Group was responsible for approximately $4.3 million of the increase in gross earnings, while the Energy Equipment Group accounted for $21.7 million of the increase in gross earnings. The increase in the Energy Equipment Group was primarily due to the acquisitions of Pyropower and TPA, Inc. in September, 1995. Selling, general and administrative expenses increased 34% in the three months ended March 29, 1996 as compared with the same period in 1995, from $54.1 million to $72.6 million. The Energy Equipment Group accounted for approximately 80% of the increase in selling, general and administrative expenses, which was primarily due to the acquisition of Pyropower, Zack Power and Industrial Co., and TPA, Inc. in September, 1995. Approximately $4.0 million of the increase in selling, general, and administrative expenses was attributable to the E & C Group. Other income in the three months ended March 29, 1996 as compared with March 31, 1995 increased to $10.5 million from $7.7 million. Approximately 50% of other income in the three months ended March 29, 1996 was interest income. The increase in other income was primarily attributable to an increase in foreign exchange gains. Other deductions in the three months ended March 29, 1996 increased $4.3 million, primarily due to higher interest expense and the increase in amortization of intangible assets due to the Pyropower acquisition. Net earnings increased by $5.5 million or 31% for the three months ended March 29, 1996 as compared to the same period in 1995, from $17.9 million to $23.4 million. The Energy Equipment Group reported increased net earnings of $4.0 million primarily as a result of the Pyropower acquisition. The E & C Group also reported increased net earnings of $1.0 million, primarily due to the improved results of the Spanish subsidiary. Financial Condition The Corporation's consolidated financial condition improved during the three months ended March 29, 1996 as compared to December 29, 1995. Stockholders' equity for the three months ended March 29, 1996 increased $14.5 million. -9- 11 FOSTER WHEELER CORPORATION AND SUBSIDIARIES Item 2.- Management's Discussion and Analysis - ------ ------------------------------------ of Financial Condition and Results of Operations (Unaudited) ------------------------------------------------------------ (Continued) ----------- During the three months ended March 29, 1996, the Corporation's long-term investments in land, buildings and equipment were $43.8 million as compared with $9.3 million for the comparable period in 1995. Approximately $34 million was invested by the Power Systems Group in build, own and operate projects during the first three months of 1996. During the next few years, capital expenditures will continue to be directed primarily toward strengthening and supporting the Corporation's core businesses. Since December 29, 1995, long-term debt, including current installments, and bank loans increased by $86.1 million, net of repayments of $19.9 million, primarily due to borrowings to fund the investments in build, own and operate projects and to fund current working capital requirements. In the ordinary course of business, the Corporation and its subsidiaries enter into contracts providing for assessment of damages for nonperformance or delays in completion. Suits and claims have been or may be brought against the Corporation by customers alleging deficiencies in either equipment design or plant construction. Based on its knowledge of the facts and circumstances relating to the Corporation's liabilities, if any, and to its insurance coverage, management of the Corporation believes that the disposition of such suits will not result in charges against assets or earnings materially in excess of amounts previously provided in the accounts. Liquidity and Capital Resources Cash and cash equivalents totaled $205.7 million at March 29, 1996, an increase of $38.5 million from fiscal year end 1995. In addition, short-term investments increased by $32.2 million to $136.1 million. During the first three months of fiscal 1996, the Corporation paid $7.9 million in dividends to stockholders and repaid debt of $19.9 million. Cash flow provided by operating activities amounted to $31.7 million. New borrowings totaled $106.0 million, resulting from investments by the Power Systems Group in build, own and operate projects and requirements to fund current working capital needs. In total, the Power Systems Group invested approximately $34.0 million in the current construction of waste-to-energy, cogeneration and hydrogen plants. Over the last several years working capital needs have increased as a result of the Corporation satisfying its customers' requests for more favorable payment terms under contracts. Such requests generally include reduced advance payments and more favorable payment schedules. Such terms, requiring the Corporation to defer receipt of payments from its customers, had a negative impact on the Corporation's available working capital. The management of the Corporation expects its customers' requests for more favorable payment terms under Energy Equipment contracts to continue as a result of the competitive markets in which the Corporation operates. The Corporation intends to satisfy its continuing working capital needs by borrowing under its Revolving Credit Facilities, through internal cash generation and third-party financings in the capital markets. The Corporation's pricing of contracts recognizes costs associated with the use of working capital. -10- 12 FOSTER WHEELER CORPORATION AND SUBSIDIARIES Item 2.- Management's Discussion and Analysis - ------ ------------------------------------ of Financial Condition and Results of Operations (Unaudited) ------------------------------------------------------------ (Continued) ----------- The Corporation and its subsidiaries, along with many other companies, are codefendants in numerous lawsuits pending in the United States and Canada, in which plaintiffs claim damages for personal injury or property damage alleged to have arisen from the exposure to or use of asbestos. At March 29, 1996, there were approximately 82,000 suits pending. Approximately 11,000 new claims were filed in the three-month period ended March 29, 1996 and approximately 6,500 were either settled or dismissed without payment. Any settlement costs not covered by the Corporation's insurance carriers were immaterial. The Corporation has agreements with insurance carriers covering a substantial portion of its potential costs relating to pending claims. Management of the Corporation has carefully considered the financial viability and legal obligations of its insurance carriers and has concluded that the insurers will continue to adequately fund claims and defense costs relating to asbestos litigation. Management of the Corporation believes that cash and cash equivalents of $205.7 million and short-term investments of $136.1 million at March 29, 1996, combined with cash flow from operating activities, amounts available under its Revolving Credit Facilities and access to third-party financings in the capital markets will be adequate to meet its working capital and liquidity needs for the foreseeable future. -11- 13 Part II. OTHER INFORMATION FOSTER WHEELER CORPORATION AND SUBSIDIARIES Item 4. - Submission of Matters to a Vote of Security Holders - ------- --------------------------------------------------- (a) Date of Meeting --------------- The Annual Meeting of Stockholders of Foster Wheeler Corporation was held on April 30, 1996 at the Hanover Marriott Hotel, 1401 Route 10 East, Whippany, New Jersey. (b) Election of Directors --------------------- Directors Elected For Withheld ----------------- --- -------- Louis E. Azzato 32,559,430 727,841 David J. Farris 32,649,734 637,537 E. James Ferland 32,650,618 636,653 Constance J. Horner 32,648,828 638,443 Frank E. Perkins 32,649,960 637,311 Other Directors continuing in office: Eugene D. Atkinson David J. Roberts Martha Clark Goss Richard J. Swift John A. Hinds Charles Y. C. Tse Joseph J. Melone Robert Van Buren (c) Additional Matters Voted Upon ----------------------------- Approval to amend the Corporation's Certificate of Incorporation so as to increase the number of shares of Common Stock which the Corporation is authorized to issue from 80,000,000 to 160,000,000 shares. For 30,681,766 Against 2,138,494 Abstain 467,011 Broker Non-Votes -0- Ratification of the appointment of Coopers & Lybrand, L.L.P. as auditors of the Corporation for 1996. For 33,127,207 Against 108,975 Abstain 51,089 - 12 - 14 Part II. OTHER INFORMATION FOSTER WHEELER CORPORATION AND SUBSIDIARIES Item 6. - Exhibits and Reports on Form 8-K - ------- -------------------------------- (a) Exhibits Exhibit Number Exhibit ------ ------- 12-1 Statement of Computation of Consolidated Ratio of Earnings to Fixed Charges and Combined Fixed Charges and Preferred Share Dividend Requirements 27 Financial Data Schedule (For the informational purposes of the Securities and Exchange Commission only.) (b) Reports on Form 8-K None. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. FOSTER WHEELER CORPORATION (Registrant) Date: May 13, 1996 /S/ Richard J. Swift ------------ -------------------- Richard J. Swift (Chairman, President and Chief Executive Officer) Date: May 13, 1996 /S/ David J. Roberts ------------ -------------------- David J. Roberts (Vice Chairman and Chief Financial Officer) - 13 - 15 EXHIBIT INDEX ------------- Exhibit Number Exhibit ------ ------- 12.1 Statement of Computation of Consolidated Ratio of Earnings to Fixed Charges and Combined Fixed Charges and Preferred Share Dividend Requirements 27 Financial Data Schedule EX-12.1 2 COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS 1 Exhibit 12.1 Foster Wheeler Corporation Statement of Computation of Consolidated Ratio of Earnings to Fixed Charges and Combined Fixed Charges and Preferred Share Dividend Requirements ($000's)
3 months 1996 1995 1994 1993 1992 1991 ---- ---- ---- ---- ---- ---- Earnings: - --------- Net Earnings $ 23,436 $ 28,534 $ 65,410 $ 57,704 $ (45,755) $ 43,268 Taxes on Income 12,271 41,129 41,457 39,114 22,321 18,017 Cumulative Effect of Change in Accounting Principle 91,259 Total Fixed Charges 16,589 59,392 45,412 43,371 46,365 41,631 Capitalized Interest (70) (106) (467) (213) (1,739) (7,824) Capitalized Interest Amortized 554 2,212 2,189 2,180 2,111 1,798 Equity Earnings of non-consolidated associated companies accounted for by the equity method, net of Dividends (259) (1,578) (623) (883) 771 (1,301) ---- ------ ---- ---- --- ------ $ 52,521 $ 129,583 $ 153,378 $ 141,273 $ 115,333 $ 95,589 Fixed Charges: - -------------- Interest Expense $13,732 $49,011 $34,978 $33,558 $34,159 $24,540 Capitalized Interest 70 106 467 213 1,739 7,824 Imputed Interest on non-capitalized lease payments 2,787 10,275 9,967 9,600 10,467 9,267 ----- ------ ----- ----- ------ ----- $16,589 $59,392 $45,412 $43,371 $46,365 $41,631 Ratio of Earnings to Fixed Charges 3.17 2.18 3.38 3.26 2.49 2.30
- ---------- * There were no preferred shares outstanding during any of the periods indicated and therefore the consolidated ratio of earnings to fixed charges and combined fixed charges and preferred share dividend requirements would have been the same as the consolidated ratio of earnings to fixed charges and combined fixed charges for each period indicated. -14- EX-27 3 FINANCIAL DATA SCHEDULE
5 This schedule contains summary of financial information extracted from the condensed consolidated balance sheet and statement of earnings for the 3 months ended March 29, 1996 and is qualified in it entirety by reference to such financial statements. 1,000 3-MOS DEC-27-1996 DEC-30-1995 MAR-29-1996 205,669 136,087 679,105 0 378,727 1,457,087 976,656 309,788 2,821,960 1,199,585 632,221 0 0 40,580 599,742 2,821,960 843,916 854,423 726,642 726,642 0 0 13,732 35,707 12,271 23,436 0 0 0 23,436 .58 .58
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